WORCESTER - The city is preparing to transfer ownership of the former historic Fire Alarm & Telegraph building in Elm Park to Spencer Savings Bank, as well as lease the bank 77,400 square feet of land around the building.

Ownership of the 6,735-square-foot, two-story English Tudor Revival-style brick building at 230 Park Ave. will be transferred to the bank at no cost, as stipulated in a deal the city struck with Spencer Savings and Preservation Worcester back in 2011 for the redevelopment of the property.

Meanwhile, the ground lease will be for an initial term of 70 years, with an option to the bank for three successive 10-year extensions.

City Manager Michael V. O'Brien is seeking authorization from the City Council to take both actions. The council will take up his recommendation Tuesday night.

The Fire Alarm & Telegraph Building, built in 1925, is on the National Register of Historic Places and has been identified by Preservation Worcester as one of the city's “Most Endangered Structures.” Spencer Savings intends to establish a retail banking office on the second floor, while Preservation Worcester will lease most of the first floor, which will contain community space and related amenities.

Preservation Worcester will manage the spaces in the building for community use. In December 2011, the City Council unanimously authorized the city to sell the building to Spencer Savings and allow for a ground lease of about 3 acres of parkland next to it. The land was needed to construct a parking lot, curb cuts and for accessibility considerations.

After concerns were raised about the amount of parkland involved in the project, it was subsequently scaled back to 2.2 acres, which has already been rezoned by the City Council, from residential-limited to business-general, to facilitated the project.

Mr. O'Brien said Spencer Savings Bank has proceeded with site plan development and is in the process of pursuing the necessary permitting approvals.

He said he anticipates that the bank will be breaking ground on the project by this spring.

Spencer Savings will finance the entire building rehabilitation except for the first-floor community space, for which local foundations will contribute $275,000. The bank will be completely renovate the building to historic standards.

Spencer Savings Bank has already opened a branch at 278 Park Avenue, and will move that branch into the Fire Alarm & Telegraph building once renovations are complete, according to president and chief executive officer K. Michael Robbins.

The Fire Alarm & Telegraph building once served as the central relay station for the city's fire alarm system. After the Fire Department abandoned its use of the building, the School Department used it to store maintenance equipment.

Also, the city stored many records from the former City Hospital on the building's upper floor. The condition of the building has deteriorated so badly that trees are growing into its foundation and out of its roof.

It has been estimated that the historic renovations and site work would cost approximately $3.5 million.